Harry Cohen: It is a pleasure to follow the hon. Member for Sevenoaks (Mr. Fallon), whose case is always coherent, even if I do not agree with his solutions. I do not agree with his assessment of yesterday's Budget, either. I think that it was a steady-as-you-go Budget designed not to choke off the recovery. I saw that the front-page headline of the  Daily Mail today called this a Budget of envy and spite-I do not know what world those people live in! I think that it was a result of the extra 1 per cent. of stamp duty on the sale of homes with a value of more than £1 million, which just shows the agenda of the chief journalists and political editors of papers such as the  Daily Mail. We know where they are coming from and people should not be taken in by their hyperbole.
	The Budget was designed not to choke off the recovery, but the Tory alternative of heavy cuts would do just that and be grossly unfair. It was not public service workers, ordinary working men and women or even the middle class who brought about the crisis and the near economic collapse; it was the reckless bankers and speculators and those like the Tories who wanted virtually no regulation or control of the banks at all. However, those without the blame are being asked to pick up the bill, and it is a heavy one. The heavy cuts that the Tories are looking to impose on them are unfair.
	I still think that we need substantial banking reform. It must never happen again-that must be the watchword -and the structural change is not in place. Let me quote President Obama in a speech on 21 January this year:
	"For while the financial system is far stronger today than it was one year ago, it is still operating under the same rules that led to its near-collapse...These are rules that allowed firms to act contrary to the interests of customers, to conceal their exposure to debt through complex financial dealings, to benefit from taxpayer-insured deposits, while making speculative investments; and to take on risks so vast that they pose threats to the entire system."
	He went on to say:
	"Never again will the American taxpayer be held hostage by a bank that is too big to fail."
	We should be saying the same for the UK taxpayer, too.
	On the "too big to fail" argument, President Obama said that he had made it the policy in the United States that there would be no further consolidation of the financial system. I think that that should be our Government's policy too, and, in addition, we should require the break-up, division or sell-off of any financial institution that, if it failed, could inflict major damage on our economy. No bank, hedge fund or any other financial institution should be in a position where it has to be protected by a taxpayers' bail-out, probably involving a huge amount of money, because if it fails-probably by its own recklessness-it wrecks the economy. That position of blackmail has to end.
	That brings me on to the situation with hedge funds. If they fail, they risk the interests of taxpayers, too. In his speech, President Obama referred to the hedge funds and said:
	"If financial firms want to trade for profit, that's something they're free to do. Indeed, doing so responsibly is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people."
	He emphasised that again when he said:
	"Banks will no longer be allowed to own, invest or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit unrelated to serving their customers."
	That is the key point. We should adopt that as a policy and ensure that none of our banks is allowed to run hedge funds.
	Hedge funds are completely private. There should be no public finance support or tax subsidy for them whatsoever. They can have their deals with the banks, but their owners should have no special ownership privileges, based on the fact that they are too big to fail. If the banks decided to take over Manchester United FC or Liverpool FC because the hedge funds could not meet their debt, then that is what they should do. My early-day motion 1185 of 23 March 2009 spells out that position.
	The Chancellor has been wrong to elevate the hedge funds to a privileged position in our economy. In a number of speeches, he has called them "systematically important" but, as I have said, the hedge funds are private and generally unregulated and should not have such status. Basically, hedge funds are the corner shops of the banking and finance industries in this country. Corner shops are important, but we would not dream of saying that they were systematically important to the economy. The Chancellor has got it wrong.
	I do not agree that the hedge funds should be considered systematically important, and we are out of step with the US in that regard. We are also out of step with the European Commission, which issued a draft directive on alternative investment fund managers in response to the revelation that the alternative investment finance sector managed some £1.9 billion in assets at the end of 2008. The directive is aimed at trying to regulate those hedge funds, but it was blocked by the UK Government. I am disappointed about that.
	Angela Merkel has been quoted as telling the Bundestag:
	"I work well with Gordon Brown, but his one-off tax on bankers' bonuses is only half as good an idea as the hedge fund rules we are considering and which Great Britain ought to approve. That is what we must fight for and I am expecting some support."
	I agree with Angela Merkel on that. Another report stated:
	"The key issue holding up a compromise deal was disagreement over the conditions on which funds and fund managers based outside the EU-including London-based managers running offshore funds-should be allowed to market to professional investors within the 27-country bloc."
	Clearly, our Government are trying to protect offshore hedge fund interests, and I do not think that they should. It was right in yesterday's Budget to apply those agreements to Dominica, Grenada, Belize and all the other offshore places, but we need Europe-wide regulation rather than individual agreements. We need to get back in line with Europe on that.
	The Government argue that action should be taken through the G20, but that is a weak argument. The G20 should be involved in regulating the hedge funds, but we should establish that regulation with the strength of EU agreement. It feels as though the Government's position is one of delay, deferral and procrastination, in order to defend the hedge fund sector. I do not agree with that.
	In mentioning the importance of accountability and transparency for investment funds, I have the opportunity to refer to a Bill that I had proposed to bring to the House; I will not have a chance to do so, because I am standing down at the election. Let me read it into the record, because it is an example of where we should be going on the issue of greater transparency. I call it the investment funds, endowment and pensions funds transparency Bill. It says that
	"every Company, Business or Authority responsible for an investment, endowment or pension fund shall publish annually, and have available for any investor or beneficiary of that fund who requests to see it, a full list of investments in that fund over the last year of the Annual Report period, together with a list of changed investments over that year with an explanation of why each was changed. Any investment transferred to, or from, a fund in which any Director, manager or major shareholder in the business has a stake must be separately listed and the Director, manager or major shareholder's interest specifically explained."
	That would stop directors, managers and major shareholders ripping off investors in those funds. That is the sort of transparency that we should provide. I am sad that I will not get to introduce that Bill, but I am pleased that I have been able to refer to it and put it on the record.
	My second point on transparency is about non-executive directors on boards of banks. I raised the issue of transparency and accountability at a meeting of the parliamentary Labour party, and the Chancellor mentioned that we would look at getting other people on the boards of banks to uphold the public interest. However, the Government have backed away from that. I am sad about that, because if those organisations are systematically important, as the Chancellor says, there should be a person directly on the boards of banks and hedge funds with a mandate to represent the public interest, keep control and whistleblow when dangerous speculation is going on. I hope that a future Government will come back to that idea. I have concentrated on those measures because they are a lot to have left out of the Budget, but they are still vital if we are to run a coherent economy.
	The deficit is the pre-eminent issue, and will be in the election, too, so the issue clearly must be addressed. I am proud of my role in tackling the deficit. I was the first in the parliamentary Labour party to call on the Chancellor and the Prime Minister to adopt a Keynesian policy. They listened and did so, and it has saved thousands of jobs. We would be in much greater deficit, and in a much greater crisis, if the Government had not followed that policy, and I pay tribute to the Chancellor and the Prime Minister for doing what they did. Of course, the deficit has to be tackled, but over a period, reasonably, and without putting the economy and recovery at risk.
	Here are some of my suggestions. First, we must recover every single penny handed out to the banks, plus interest. I was pleased that the Chancellor included that point in his speech; I pay tribute to him for that. We have not heard the same commitment from the Tory party. I suspect that that is because the Tories want to sell off the state interest in the banks-other financial institutions as well, but banks in particular-as soon as the profits start to flow again. That money would not come back; the taxpayer would be sold short.